Thursday, December 31, 2009

Environmental goods and services are the benefits society obtains from the environment and ecosystems, both natural and managed, such as water filtration, flood control, provision of habitat, carbon storage, and many others. Farmers’ participation in providing these types of goods and services began in earnest in the 1990s with the development of watershed approaches incorporating nutrient credit trading and wetlands mitigation banking, and continued with the more recent development of voluntary carbon credit markets. These efforts have triggered further interest in the possibility of developing market and trading opportunities for farmers and landowners as a source of environmental offsets. These services would be in addition to the food and fiber services traditionally supplied by the agriculture and forestry sectors. Congress is expressing growing interest in developing such market-based approaches to complement existing federally supported programs that promote conservation in the farm and forestry sectors, as well as to complement existing and/or emerging environmental regulations or natural resource requirements that may affect the agriculture and forestry sectors.

The enacted 2008 farm bill (P.L. 110-246, the Food, Conservation, and Energy Act of 2008) contains a new conservation provision that seeks to facilitate the participation of farmers and landowners in environmental services markets by directing USDA to develop technical guidelines for measuring farm- and forestry-based environmental services. This provision focuses first on carbon storage and indirectly references various agriculture and forestry provisions in some legislative initiatives that are being considered as part of the broader climate change debate, which have highlighted the perceived need for uniform standards and ways of measuring emissions reduction and increases in carbon storage in the agriculture and forestry sectors. These types of provisions could expand the scope of existing land-based conservation programs and facilitate the development of private-sector markets for a range of environmental goods and services from farmers and landowners.

Among the possible questions that may emerge as these agriculture and forestry provisions are either implemented as part of U.S. farm conservation policy, or considered as part of a broader climate change initiative, are the following: Can agricultural interests effectively provide environmental services along with traditional food and forestry services? How would uniform standards address differences within production areas, types of resources, and ecosystems? What is the role of USDA as the lead federal agency in establishing technical guidelines for the agriculture and forestry sectors? How would collaboration work between other participating federal agencies? How would the agreed-upon decisions and standards work within existing regulatory authorities, and within possible forthcoming regulatory authorities, such as proposed climate change options currently being debated in Congress? What role should federal agencies play in establishing environmental services markets?

Date of Report: December 15, 2009
Number of Pages: 10
Order Number: RL34042
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Friday, December 25, 2009

The Environmental Protection Agency (EPA) published its final revisions to the National Ambient Air Quality Standards (NAAQS) for particulate matter (particulates, or PM) on October 17, 2006. EPA’s actions leading up to and following promulgation of the 2006 standard have been the subject of considerable congressional oversight. EPA’s ongoing implementation of the standard, beginning with the designation of those geographical areas not in compliance, will likewise be an area of concern and debate among many Members of Congress, states, and other stakeholders for some time.

Promulgation of NAAQS sets in motion a process under which the states and the EPA identify areas that exceed the standard (“nonattainment areas”) using multi-year air quality monitoring data and other criteria, requiring states to take steps to reduce pollutant concentrations in order to achieve it. On November 13, 2009, EPA published its final designations for the 2006 PM NAAQS that include 120 counties and portions of counties in 18 states as nonattainment areas based on 2006 through 2008 air quality monitoring data. The final designations, which include tribal land of 22 tribes, were effective as of December 14, 2009. States have three years from the effective date to submit State Implementation Plans (SIPs), which identify specific regulations and emission control requirements that would bring an area into compliance.

In December of 2008 EPA had identified 211 counties and portions of counties (58 areas) in 25 states for designation as nonattainment for the 2006 PM NAAQS based on 2005 through 2007 data. The publication of these designations—and thus the effective date of the final designations—was delayed pending review by the current Administration. The review was initiated, in part, in response to a White House January 20, 2009, memorandum regarding regulatory review. This review and the availability of more current air quality monitoring data resulted in the final designations published in November 2009.

The 2006 NAAQS strengthened the pre-existing (1997) standard for “fine” particulate matter 2.5 micrometers or less in diameter (PM2.5) by lowering the allowable daily concentration of PM2.5 in the air. The daily standard averaged over 24-hour periods is reduced from 65 micrograms per cubic meter (μg/m3) to 35 μg/m3. However, the annual PM2.5 standard, which addresses human health effects from chronic exposures to the pollutants, is unchanged from the 1997 standard of 15 μg/m3. The 2006 NAAQS did not substantially modify the daily standard for slightly larger, but still inhalable, particles less than or equal to 10 micrometers (PM10), retaining the 24-hour standard but revoking the annual standard for PM10.

EPA’s final nonattainment designations are only for the revised 2006 24-hour PM2.5 standard. The EPA did not require new nonattainment designations for PM10. The final designations for the 2006 PM2.5 NAAQS include a few areas designated nonattainment for PM2.5 for the first time, but, as expected, the majority of the counties identified overlap with EPA’s final nonattainment designations for the 1997 PM2.5 NAAQS. EPA’s designations for the 1997 PM2.5 NAAQS included all or part of 204 counties in 20 states and the District of Columbia. Most of them were only exceeding the annual standard; only 12 counties were exceeding both the 24-hour and the annual standards. Thus, the 2006 tightening of the 24-hour standard resulted in an increased number of areas being designated nonattainment based on exceedances of both the 24-hour and the annual standards.

Date of Report: December 17, 2009
Number of Pages: 33
Order Number: R40096
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Wednesday, December 23, 2009

Deforestation releases substantial amounts of carbon dioxide, about 17% of all anthropogenic greenhouse gas (GHG) emissions. Legislation has been proposed for U.S. targets to reduce GHG emissions. The two primary bills, H.R. 2454 and S. 1733, include provisions that would reduce emissions from deforestation and forest degradation; these activities are referred to as REDD. Both bills would use allowances to build capacity in developing countries and supplement U.S. emissions reductions; both would allow offsets for U.S. industries; and both contain a reserve to stabilize carbon prices.

The bills are generally similar on allowances for REDD activities, but significant differences exist. H.R. 2454 would rely on the U.S. Environmental Protection Agency for implementation; S. 1733 would use the U.S. Agency for International Development. H.R. 2454 contains eligibility criteria and implementation standards for the supplemental emissions reductions, and identifies the types of activities that could be funded. S. 1733 would rely on federal agencies to issue regulations for these details. H.R. 2454 also contains more details on monitoring and reporting.

The bills are similar on REDD offsets, although H.R. 2454 generally contains more details for implementation. Both would limit the quantity of international offsets—1 gigaton or billion metric tons (GtCO2) in H.R. 2454, and 0.5 GtCO2 in S. 1733—but would allow some additional international offsets if domestic offsets are insufficient. Both contain guidelines that require agreements with the developing country, and national baselines and strategic forest plans by the developing country. However, neither defines the types of REDD activities that qualify. Both would allow project level and state or regional level REDD offsets, and both would phase-out such offsets to encourage national level REDD offsets, but neither bill describes how the transition from project level or state level REDD offsets to national offsets is to proceed. Both bills also address the rights and needs of indigenous peoples and forest-dependent communities, requiring due regard to indigenous and local rights and directing consultations with and the participation of indigenous peoples and forest-dependent communities.

There are several concerns about REDD allowances in the bills. H.R. 2454 provides significant details for supplemental emissions reductions, but eligible forests are undefined and the criteria and standards might be insufficient for effective implementation. The bills contain no penalties or consequences for failures to achieve the anticipated reductions in carbon release or to measure and monitor the activities. Both bills would use allowances for building capacity (e.g., personnel and equipment) to measure, monitor, and enforce REDD activities in developing countries, but neither bill defines capacity-building activities that could be funded, nor allocates funds between capacity building and supplemental emissions reductions.

There are also concerns about REDD carbon offsets. There are issues for carbon offsets generally—their verification (measuring, monitoring, and reporting carbon sequestration), their additionality (activities not already occurring or required), their permanence, and leakage (merely shifting deforestation to other locations). These issues are exacerbated for REDD offsets, because many developing countries do not have the capacity to address these concerns. In addition, many are concerned that REDD offsets may inhibit developing countries from committing to GHG reductions and from evolving to low-carbon economies.

Date of Report: December 22, 2009
Number of Pages: 15
Order Number: R40990
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Saturday, December 19, 2009

On December 15, 2009, the Environmental Protection Agency (EPA) took its most important action to date related to climate change. EPA published its final determination that the combined greenhouse gas (GHG) emissions from new, light-duty motor vehicles in the United States contribute to an “endangerment” from climate change. More precisely, EPA found that such emissions, in the words of Clean Air Act (CAA) section 202(a), “cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare.” Under section 202(a), this finding requires that EPA promulgate “standards” to control such emissions—as the agency proposed to do in advance of its endangerment determination.

Some groups have objected to the endangerment determination and the emission standards to follow, arguing they will trigger a “cascade” of unacceptable regulatory consequences under other CAA provisions. These regulatory consequences, they say, would impose unattainable GHG-concentration goals on EPA and the states, and/or economically and administratively unreasonable burdens. This report examines the CAA provisions that have figured in this debate to see whether this alleged cascade of legal consequences likely would occur.

First, the report examines CAA sections that, like section 202(a), are triggered by endangerment findings. Of these, the one most likely to require EPA regulatory action after the 202(a) endangerment finding is section 111, authorizing new source performance standards—but only as to stationary source categories emitting the largest amounts of GHGs. Section 111, however, affords EPA wide discretion in setting new source performance standards. Two other sections that arguably might be triggered are 108, requiring national ambient air quality standards, and 115, which requires states to revise their implementation plans to prevent or eliminate the endangerment of public health or welfare in a foreign country. As to these sections, however, the arguable infeasibility of the regulatory goals—even if GHG emissions in the United States are significantly reduced, atmospheric concentrations would decline little—will give EPA room to argue that regulatory action is not mandatory. Other endangerment-triggered sections of the CAA can be distinguished from section 202(a) by their explicit terms, and thus would likely not be triggered by the 202(a) endangerment finding.

Second, the report looks at CAA provisions having no endangerment trigger. Of these, EPA has conceded that two require the agency to act after it promulgates the required emission standards following the 202(a) endangerment finding. One provision would require EPA to impose “best available control technology” (BACT) on GHG emissions from any major emitting facility proposed to be constructed in a Prevention of Significant Deterioration area. The other, Title V, creates an operating permit program for stationary sources of emissions, and would require stationary sources subject to BACT under the first provision to also apply for Title V permits. As to each of these requirements, EPA has proposed a “tailoring rule” setting emission thresholds far higher than in the CAA, at least for a few years. EPA justifies the departure from statutory language under the case law doctrines of “absurd results” and “administrative necessity.”

A caveat: the issue analyzed in this report is important primarily if Congress does not enact climate change legislation that puts regulation of GHGs beyond the reach of some of the CAA provisions discussed here. In particular, the House-passed climate change bill, H.R. 2454 (the American Clean Energy and Security Act of 2009), states that three of the CAA sections treated in this report, and one CAA title, may not be used to address air pollutants based on their climate change impacts.

Date of Report: December 15, 2009
Number of Pages: 20
Order Number: R40984
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The United States and almost 200 other countries are negotiating under the United Nations Framework Convention on Climate Change (UNFCCC) to address climate change cooperatively beyond the year 2012. Parties agreed to complete the negotiations by the 15th meeting of the Conference of the Parties (COP-15) from December 7-18, 2009, in Copenhagen. However, some nations’ leaders have indicated that the Copenhagen outcome is likely to be a political agreement providing a mandate for a later legally binding, comprehensive agreement.

The negotiations are intended to decide the next steps toward meeting the objective of the UNFCCC, to stabilize greenhouse gas concentrations in the atmosphere at a level that would

prevent dangerous anthropogenic interference with the climate system. Most Parties conclude the objective requires avoiding a 2 degrees Celsius increase of global mean temperature from pre-industrial values and reducing global greenhouse gas (GHG) emissions by 50% by 2050 from 1990 levels, with industrialized countries’ share to be an 80-95% reduction. The UNFCCC principle of common but differentiated responsibilities among Parties permeates debate about obligations of different forms, levels of effort, and verifiability. Key disagreements remain among Parties:

• GHG mitigation: Some countries, including the United States, seek GHG actions by all Parties; many developing countries argue that differentiation should exclude them from quantified and verifiable GHG limitations. Many vulnerable countries are alarmed that GHG targets proposed by wealthy countries are inadequate to avoid 2 degrees C of temperature increase and associated serious risks.

• Adaptation to climate change: Many countries, including the United States, wish to use bilateral and existing international institutions, with incremental financial assistance, targeted at the most vulnerable populations; many developing countries seek a fully financed, systemic, and country-determined effort to avoid damages of climate change, to which they have contributed little.

• Financial assistance to developing countries: Many wealthy countries, including the United States, propose private sector mechanisms, such as GHG trading, along with investment-friendly economies, as the main sources of financing, with a minor share from public funds; many developing countries argue for predictable flows of unconditioned public monies, with direct access to an international fund under the authority of the Conference of the Parties.

• Technology: Many countries, including the United States, maintain that private sector mechanisms are most effective at developing and deploying the needed advanced technologies, enabled by balanced trade and intellectual property protection; some countries seek new institutional arrangements and creative mechanisms to share technologies to facilitate more effective technology transfer.

Negotiators face a complex array of proposals. Many delegations, including the United States, approach Copenhagen with unresolved climate agendas at home. President Obama has announced an intention to offer a “provisional” GHG target for the United States in the range of 17% below 2005 levels by 2020, ultimately to be brought “in line” with energy and climate legislation. The U.S. delegation negotiates without clear signals as to what the Congress would support. U.S. influence in the negotiations may also be impaired by having signed but not ratified the Kyoto Protocol, and by being almost $170 million in arrears in contributions to the multilateral Global Environment Facility.

Date of Report: December 9, 2009
Number of Pages: 19
Order Number: R40910
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